OVERVIEW OF THE
PRESENTATION
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Introduction
Sources of SAMDI Revenue
Graphic Presentation of Revenue by Source
Background: SAMDI
Brief Historical Background of Cost Recovery
Aim of Cost Recovery
Goals of Cost Recovery
Status of Cost Recovery
Graphic presentation of the Financial Status
Challenges
The Way Forward
INTRODUCTION
SAMDI’s vision is:
the creation of a self sustaining
Organisational Transformation Centre of
Excellence for Public Service Delivery
SOURCES OF SAMDI’s
REVENUE
Cost Recovery
Donor Funding
Voted Funds
SAMDI TOTAL REVENUE
60000
50000
40000
R'000 30000
20000
10000
0
1
2
3
4
5
FINANCIAL YEARS (w here 1 = 2000/01 and 6 = 2005/06)
Cost Recovery
Donor funding
Augmented
Voted funds
6
BACKGROUND: SAMDI
• Before 1994 training and development in the
Public Service was provided by the Public
Service Training Institute (PSTI), which was then
changed to the South African Management
Development Institute (SAMDI)
• Training and Development was offered free of
charge by this body, and focused on technical
skills
• In October 1999, SAMDI became a schedule 1
Department, with its own Director-General
accountable to the Minister for Public Service
and Administration.
BACKGROUND: SAMDI
(continued)
• Concerns were raised that SAMDI should
compete with other providers and not to enjoy
monopoly like the PSTI
– This concern is also reflected in the White
Paper on Public Service Education and
Training
– The rationale was that competition would lead
to quality service and programmes
• Cabinet then mandated SAMDI to embark on
Cost Recovery
BRIEF HISTORICAL
BACKGROUND ON COST
RECOVERY
• Cost recovery strategy was initiated during 1999
• National Treasury approved the Trade Account
in 2001
• National Treasury approved the initial tariffs in
2001
• Shadow invoicing commenced during October
2001
• Implementation of cost recovery from 1 April
2002
• Tariffs amended in October 2002 (More market
related)
COST RECOVERY
• Aim: To support SAMDI business through the
recovery of costs on services rendered through
fair and recognised outsourcing processes
GOALS OF COST RECOVERY
Short Term
• To recover portion/part of costs
• Annually increase the portion of costs to
be recovered
Long Term
• To recover all costs( Break-even)
• To be sustainable
STATUS OF COST
RECOVERY
• Total revenue – April 2002 to March 2003 –
R 6 778 947
• 1036 Invoices issued to the amount of –
R 13 049 089
• Total debtors outstanding – R 4 628 111
• Tariffs revised during October 2002
– Inclusion of consultation fees
– Inclusion of professional management fees
Graphic presentation of
the financial status
Total Invoices
Total Revenue
Total Debtors
CHALLENGES
• Implementation and monitoring of the Cost
Recovery Strategy and Financing of training
and development programmes
– Willingness of departments to pay for services
– Shrinking budget lines versus cost of training and
development
– Enforcement of payment for training and
development services rendered
– Expensive Leadership and Management
Development Programmes – Cost of external
service providers
– Government priority programmes versus cost
recovery
CHALLENGES Continue
• Aggressive marketing of SAMDI products and
services to departments
• Systems for Cost Recovery
– GAAP compliant, Booking, Invoicing, Certification
and Weekly financial reporting
• Management of debtors
• Capacity to handle the number of invoices
issued
• Capacity to handle the follow up of debtors
• To achieve an un-qualified audit report
• Access to skills development levy
THE WAY FORWARD
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The strategic plan for SAMDI
Structure linked to the strategic plan
Revisit the strategic marketing plan
Consolidation of the funding structure
THANK YOU
Please visit
SAMDI’s website at
www.samdi.gov.za